Chapter 24, Problem 2CP

A

Summary Introduction

To think critically about: The Karl report which consists the values of various index according to the market performance.

Introduction: Karl who is manager of Alpine company as well as take a responsibility of pension fund, analyze the market and gives a report to board members. This report includes values of various indexes.

B

Summary Introduction

To think critically about: Compare the last fund performance to the other pension funds.

Introduction: As the investment is low in equity due to low returns. Others give more returns at a rate of $13.3\%$ . To enhance the returns investment limit should be high.

C

Summary Introduction

To think critically about: For the last 5 years stock performance is very poor.

Introduction: The return of Alpine fund and S&P $500$ index fund are near to each other. Return rate of Alpine is $13.3\%$ and $13.8\%$ for the S&P $500$ index.

D

Summary Introduction

To think critically about: Long term investment with great return as U.S treasury bills.

Introduction: Karl bothered to the long term investment because U.S bills give more returns in short period of time.

E

Summary Introduction

To think critically about: Returns of the time-weighted index.

Introduction: When we compare the returns values, we get that time-weighted returns are more profitable compare to the dollar-weighted returns.